Paying for Your Education: 4 Alternatives to Student Loans

As the cost of higher education soars so does student loan debt. One recent report noted that educational loans are now only second to mortgages when it comes to generating debt and that the default rate for these loans is at ten percent and climbing. This data may cause you to think twice before pursuing a college degree; however, there are funding alternatives that may help you achieve your educational goals, whether you are a recent high school graduate or an adult student seeking a graduate degree.

1. Choose a School With Flexible Tuition Plans

Some universities offer a variety of tuition plans that allow students to pay for their tuition in several installments over the course of one semester. Paying out tuition costs over the course of ten or twelve months may help ease the burden of rising costs and give you more flexibility when it comes to paying for other necessities, such as textbooks and lab fees. It is wise to meet with a university financial advisor to find a plan that best suits your needs before you agree to a tuition payment plan.

2. Consider a Non-Profit College

You may be able to offset the cost of higher education by attending a non-profit college. These institutions are usually independently owned and operated and are student-oriented, not profit oriented. Because these universities are not required to generate a profit for any shareholders, they pass these savings onto the students. As a result, tuition at a non-profit school may cost anywhere from $5,000-$6,000 less than a for-profit school. These savings may allow you to reduce or eliminate the need for student loans.

3. Use Peer-To-Peer Loans

Non-traditional loans may offer you a variety of options when it comes to paying for your education, including peer-to-peer loans. Unlike a bank or student loan, this type of lending is between two individuals instead of an individual and a financial institution. There are several websites that focus on matching students with viable lenders, and a few focus directly on educational loans.

There are several advantages to using peer-to-peer lending. One of the greatest is that the loans tend to have fixed rates and usually do not require a co-signer, which can be helpful if you have not yet built a credit history or have a fair credit score. You may want to shop around on some peer lending sites before you sign off on a loan, as interest rates and lending terms may vary.

4. Slash Your Spending

Saving money for college is not easy for anyone, especially when costs continue to rise. However, taking a hard look at your budget and making an effort to curtail your spending can generate money you can put toward your education. For example, if you live in Seattle and need a car to get to school, review your current insurance policy and then shop around different Seattle auto insurance companies to find a more competitive rate and discounts that may help you save money each month.

Student loan debt in America is soaring, with many students finding themselves in default. However, you can protect your credit, your good name, and achieve your educational goals when you take the time to discover alternatives to traditional student loans.